If continuing unemployment claims are down, why is it so hard to find a job?

Last week, 210,000 people filed new claims for unemployment.

That’s up just a touch from the week before, but still low by historical standards, according to the Labor Department. Job openings are also near a multi-year low, according to the BLS.

So that low-hire, low-fire job market we’ve been talking about still seems to be intact.

But there’s one curiosity here, which is the data for continuing unemployment claims. Those fell by about 32,000 the week before last and have been trending down since late last year.

If it’s so hard to find a job right now, why are fewer people filing continuing unemployment claims?

The war in Iran has pushed energy prices higher. But employers haven’t really reacted, said Guy Berger at the Burning Glass Institute.

“Does not mean that layoffs aren’t coming, but so far they are not showing up,” Berger said.

He said layoffs have actually been low for months now. That’s a big reason continuing unemployment claims have been falling. Another reason is the growing share of job seekers who aren’t filing those claims.

“The majority of the unemployed are typically not eligible for unemployment insurance,” said Betsey Stevenson at the University of Michigan. She said you need a work history to get those benefits.

“There's a lot of young people trying to get entrance into this labor market who are, are struggling to do so. They're not eligible for unemployment insurance,” Stevenson said.

And then there are the folks who have been filing claims month after month after month, said Alí Bustamante, an economist at the University of New Orleans.

“The length of unemployment duration has actually increased drastically,” Bustamante said.

To the point where many have maxed out their benefits. Most states allow people to collect unemployment for about six months. And the share of job seekers who reach that maximum before finding a job has climbed from around 30% in 2022, to around 40% at the start of this year, according to data from the Labor Department.

“The diminishing continued claims is largely a product of just folks rolling off of benefits instead of actually them being rehired,” Bustamante said.

Where the labor market goes from here depends in part on where the war in Iran goes from here, said Michelle Meyer at the Mastercard Economics Institute.

“The key question is over the duration of this shock,” Meyer said.

She said if the war drags on, “if energy prices remain at uncomfortably high levels, then I think you start to see the shift in behavior, both corporate behavior and consumer behavior.”

That could make life even harder for job seekers, Meyer said, especially in sectors like manufacturing that are most sensitive to energy prices.